[chc]

The bulk of this article is based on a misconception. The author doesn't seem to realize there is a difference between between Time Warner and Time Warner Cable (which is especially ironic here since Forbes automatically links to their separate NYSE listings). HBO is owned by Time Warner Inc., which severed its ties with Time Warner Cable Inc. years before Game of Thrones ever aired.

HBO's reason for staying with cable doesn't seem to have all that much to do with its corporate overlords. It seems to be more closely related to the fact that HBO has evolved symbiotically with cable over many decades, and striking out on its own would require HBO to make use of a lot of muscles it just never needed before (for example, advertising). So until their business model starts actually causing problems, they're OK with being pirated left and right because sticking with the tried and true still makes them money hand over fist.

[jonnathanson]

"It seems to be more closely related to the fact that HBO has evolved symbiotically with cable over many decades"

Yes, and that might even be an understatement. To the extent HBO moves into direct-subscription or advertising-driven models, it'll need to find a way to do those in addition to its existing, cable-licensing business -- not as an alternative.

The problem is that HBO makes a lot more money licensing to cable providers than it realistically could by selling episodes a la carte, by selling advertising, or by selling HBO subscriptions individually. Any president or C-level exec at HBO (regardless of its corporate parent) is going to have a hell of a time initiating that process, politically, organizationally, or economically. It would basically amount to telling shareholders, stakeholders, and peers that one is going to jeopardize X to pursue a very uncertain X/4.

HBO will go a la carte, or ad-driven, if and when it can figure out how to make the economics of doing so more attractive than the economics of B2B licensing fees. That's easier said than done. It will probably require one of two things: 1) a platform-agnostic licensing strategy, i.e., to diversify away from cable; or 2) a complete rethinking of content forms, types, and salability.

It bears mentioning that even ad-driven broadcast networks make more money off of cable licensing than they do from advertising. (The revenue split is about 48% advertising and 52% cable/distribution fees, trending toward 40/60.)

As for the article's fundamental mistake--conflating Time Warner with Time Warner Cable--that's a pretty big one. TWC spun out from TW back in 2009.

[sentenza]

The question is: Is the payoff worth it, considering that entire countries are currently "conditioned" to obtain Game of Thrones by illegal means?

Many people speak of Australia, but take Germany as another extreme example. HBO doesn't offer its services here so there are only two options if you want to watch Game of Thrones:

1: Get a subscription of Sky, which is mostly sports and has a minimum subscription time of 2 years. So if you're not into sports, that's about 800$ for two seasons of Game of Thrones.

2: Wait one year and then buy the DVD, because it will be available exactly one year later.

The thing about culture, though, is that you can't participate in the phenomenon that is happening _now_ if you have to wait a year.

So everybody here is pirating it like crazy. Curiously enough, Germany never appears in the piracy statistics because due to some weird legal specialties here, your chance of getting caught when using Bittorrent are 100%.

All the non-tech people I talk to watch it using sketchy streaming sites, thus generating advertising revenue for criminals and infecting their Windows boxen with malware.

I don't know what the long-run consequences are, but they can't be good.

[pbreit]

Why don't they just let the cable companies deliver it and figure out a decent split?

[sliverstorm]

I'm sure HBO can figure out advertising if it needed to. I gather it is simply financial; advertising costs money. By not having to advertise, HBO saves money, so there's clear monetary benefits even in addition to their cut of the subscriber fees.

[balls187]

Who runs the HBO adverts in magazines and newspapers?

http://www.adweek.com/files/imagecache/node-blog/blogs/got_d...

[sliverstorm]

According to HBO? The cable networks.